OIG investigators on the lookout for workers’ comp fraud, waste and abuse

The camera doesn’t lie. So when investigators with the TDCJ’s Office of the Inspector General (OIG) viewed the video surveillance tape, they knew they had their man.

The man on the tape had worked as a correctional officer at a Gatesville-area prison before claiming a debilitating back injury and filing for worker’s compensation benefits from TDCJ. But there he was on the tape six months later working a construction job without any sign of injury. In fact, investigators later learned that the man had been running a construction/handyman business out of his home while collecting temporary income benefits from the state.

No more. He was arrested by OIG investigators and charged with defrauding the workers’ compensation system, a third-degree felony punishable by a fine and two to ten years in prison. And because his fraud was spotted early on, the state was able to administratively terminate more than $45,200 in benefits the man would have received had he collected payments for the remaining 18 months he was to have been off work.

“The thing about it is that years ago he may have gotten away with it,” said TDCJ Inspector General John Moriarty said. “But not today. Now we’ve got people looking at it.”

And they’re looking hard. Working in conjunction with the State Office of Risk Management, which processes workers’ compensation claims, the State Auditor’s Office, CrimeStoppers and TDCJ’s Office of Risk Management, OIG has opened 28 criminal cases in the past 18 months. Over the same time period, TDCJ workers’ compensation claims have dropped by approximately $4 million.

“We believe that there is some manipulation of the system going on, and I think the combination of us doing the investigations and Risk Management being proactive that a four million dollar drop in payouts is pretty substantial,” Moriarty said.

Investigators with Moriarty’s office first started looking into workers’ compensation fraud at the request of prison wardens who suspected that some employees were feigning disabling injuries and abandoning their duty posts at a time when many units were short of officers.

“They brought it to our attention that they had some serious concerns, that with the staffing shortages, they had some people who were abusing the workers’ compensation program,” Moriarty said. “They had reports that some employees were working second jobs while out on workers’ compensation.”

In response, OIG opened investigations, and in May 2003, set up a toll-free Workers’ Compensation Hotline for employees to report suspected abuses around the clock. Fourteen calls have been made to the hotline since its activation and investigators have also received information directly from unit personnel regarding employees who may be fraudulently receiving workers’ compensation benefits. The State Office of Risk Management has also forwarded referrals to TDCJ investigators.

“We get all kinds of things coming in,” Moriarty said about the calls to the hotline. “And with some of them, we realize there are vendettas, and that’s our job to sort out. But the employee who calls in and has a legitimate concern, we’re checking it out.”

According to the State Office of Risk Management, OIG investigations of three suspected fraud cases during the 2003 fiscal year stopped $188,441 in payouts. Between September 2003 and May 2004, payouts of more than $262,000 were administratively terminated in seven cases investigated by OIG. In one case, investigators found that a man was working as a correctional officer for TDCJ while collecting workers’ compensation benefits from another state agency.

Ten of Moriarty’s investigators are now taking a certified fraud examiner’s course that trains them to conduct white-collar crime investigations dealing with financial records to detect fraud. Another 10 investigators will become certified later this year. In October, TDCJ also published a fraud prevention and detection plan in response to an initiative by the Governor’s Office to eliminate fraud, waste, and the abuse of state resources.

“The aim of the plan is to make sure that the checks and balances are in place by policy in order to deter fraud throughout the agency,” Moriarty said. “It affects every division of TDCJ.”

Moriarty said the focus on fraud is especially important at a time of tight budgets and staffing shortages in the agency.

“I think that the awareness that there is a good possibility that if you’re out perpetrating fraud against the agency there is a good chance you’re going to be caught now,” Moriarty said. “Even if they don’t go to prison, there’s restitution that they’ve got to pay and they’re convicted felons for the rest of their lives.”

The Correctional Institutions Division at the systemwide warden’s meeting in Austin presented Warden of the Year awards based on unit size and mission.

Senior Warden Arthur Anderson of the Smith Unit in Lamesa was named the recipient of the James H. Byrd, Jr. Memorial Award, which is now presented annually to the year’s top correctional administrator at large TDCJ facilities. The second Warden of the Year award went to Kenneth Negbenebor, senior warden of the Hospital Unit at Galveston as well as the Young Medical Facility in Texas City.

The Memorial Award is named in remembrance of longtime employee James H. Byrd, Jr. who served as senior warden of the Clemens Unit in Brazoria County prior to his death in 1998. Anderson began his career as a correctional officer in 1982 and rose through the security ranks at various units prior to his assignment to the 2,125-bed Smith Unit. He holds associate degrees in both correctional science and law enforcement and police administration.

Negbenebor is a 20-year veteran of TDCJ who previously served as a unit health administrator, director of psychological programs, and as senior warden of the Jester IV facility in Sugar Land. He holds a master’s degree in health care administration.

Also recognized for outstanding performance and service in 2004 were:

• Corrections Line Officer of the Year: CO V Carlos Rodriguez, Lopez Unit, Edinburg. Rodriguez has seven years of service with TDCJ.

Retired TDCJ Executive Director Gary Johnson’s 28 years of dedicated service to the Texas Department of Criminal Justice won accolades from the Texas Board of Criminal Justice (TBCJ), Governor Rick Perry, and various other state, city and county officials during the TBCJ’s meeting in Huntsville on December 3. Sen. John Whitmire of Houston, chairman of the Senate Criminal Justice Committee, said he respected Johnson both as a public servant and friend. Huntsville Mayor Pro Tem Steve Smith proclaimed December 3 as “Gary Johnson Day” in the city and a proclamation from Gov. Perry described him as “a wise steward of public resources” during his 3 1/2 years as executive director. TBCJ Chairman Christina Crain said Johnson’s legacy to the state and agency was to create a seamless criminal justice system from the components of TDCJ and put a creative and effective management team in place prior to his departure. “We will remember him as a great leader and a great mentor,” said Brad Livingston, who succeeded Johnson as executive director in November. Seated from left; Chairman Christina Crain, Gary Johnson, Executive Director Brad Livingston. Standing from left; Board members Patricia Day, Greg Coleman, Oliver Bell, Judge Mary Bacon, and Pierce Miller.